Why Snapchat’s $24 Billion Valuation Was No Surprise to Mobile Marketers

A few weeks ago, when Snap Inc. started trading at $24 per share, the mobile application (and self-proclaimed “camera company”) proved that it was a force to be reckoned with. Snapchat boasts 161 million mobile daily active users, and users interact with the app more than 18 times per day, on average. The company has shifted from being a provider of ephemeral messaging to a social entertainment hub, enabling family and friends to share videos, news and music. As such, over the past few years, large consumer brands like Amazon, Sour Patch Kids, Gatorade, Taco Bell and the National Basketball Association are increasingly using Snapchat to expand their reach among the younger demographic, reminding users of their products and personalities through creative content. The most successful advertisers are now delivering key messages to their consumers in such a way that the content seems organic and not advertorial. Many brands are seeing long-lasting success through the social platform. Candy company Sour Patch Kids wanted to reach teen customers so it partnered with influencer Logan Paul to create a campaign with silly and funny snaps of Paul and the “Sour” and “Sweet” characters. The first video received nearly 600,000 views, with the fifth story reaching 6.8 million story views. The campaign ultimately helped the company add 120,000 new Snapchat followers. While full Snapchat campaigns have led to success for companies, simple filters can also garner strong attention for a brand. Gatorade’s 2016 Super Bowl filter was viewed 100 million times that day, and a few months later, a Taco Bell Cinco De Mayo Snapchat filter resulted in an astounding 224 million views in one day. Both received large media coverage for their results. While these campaigns were successful, companies looking to achieve similar favorable results on Snapchat must continue to adjust their campaign execution if they want to remain relevant and heard with consumers hungry for fresh content. As audiences look to digest more creative digital content, consumer brands are investing more than ever in their own digital initiatives to directly engage these audiences. Companies of all sizes are shifting their resources to better connect with their consumers on mobile. According to a recent survey, in 2015, more than one-half of companies had implemented a mobile strategy, compared with 7 percent in 2013. Today, that number should be nearing 100 percent as companies realize that mobile may be the only way to reach their customers. For example, in June, Chick-fil-A launched its mobile app, which was downloaded 1 million times in just three days and was the top free app in the iTunes App Store (unsurprisingly, free food is a powerful incentive). Domino’s Pizza’s embrace of technology—including an app that orders a pizza just by opening it with no clicking required—helped generate more than 50 percent of U.S. sales from digital channels at the end of 2015 and nearly $5 billion annually in global digital sales. More than one-half of the company’s national television campaign topics were also directly related to digital initiatives. We should also expect to see brands further collaborate with game companies, as mobile games rank third behind social media and video apps in terms of average time spent per day. Niantic’s Pokemon Go has already collaborated with retail stores directly within the game. In December, Starbucks became a noted sponsored location within the game and turned around 7,800 stores into Pokestops or gyms, further enticing players to the store by offering a special Pokemon Go Frappuccino. Mobile app usage shows no signs of slowing down as time spent in apps worldwide reached nearly 900 billion hours in 2016. The success of Snapchat is only one example of the mobile branding opportunities companies have at their reach. One thing is for sure: The business-to-consumer landscape is rapidly evolving, and companies need to continuously adjust their mobile strategies if they want to stay in the game. Terence Fung is chief strategy officer for game developer Storm8. Image courtesy of vivalapenler/iStock.